Estate, Powers and Trusts, § 3-3.9: Testamentary Direction to Purchase Annuities

One of the reasons that a last will and testament is one of the most important estate documents is due to the fact that it allows the testator to retain some measure of control over what happens to his (or her) estate after death. With a will you can make very specific decisions as to which of your family and friends will get your property. You can even decide to disinherit family members if you so choose. You can make specific decisions about your property. For example, under New Your Estates, Powers and Trusts Law § 3-3.9, if you state in your will that assets are to be used to purchase annuity for a beneficiary, the beneficiary must receive an annuity and cannot instead opt to receive cash. To learn more about the limitations that you can place on testamentary gifts, contact an experienced New York will lawyer.

You can make provisions in your will that your executor use assets to purchase an annuity for a particular beneficiary. There are a variety of reasons that you may chose to make such a provision. For example, you may wish to ensure that the beneficiary has regular income well into the future. Regardless of your reasons, it is the executor’s duty to fulfill your wishes as memorialized in your will. Your beneficiary may prefer to have the lump sum capital that would be used to purchase the annuity. After all, it may be more desirable to have a lump sum of cash immediately instead of receiving much smaller amounts in intervals over the course of an extended period of time. Of course, the testator has the option of giving the beneficiary the right to choose whether to receive an annuity or to receive the capital that would have been used to purchase the annuity. In the absence of such option explicitly mentioned in the will, the executor must purchase an annuity for the benefit of the beneficiary.

The only way to ensure that your wishes are fulfilled is to work with an experienced New York will lawyer who is able to create a customized will based on your wishes, your financial situations, and your family’s needs. For example, if you have minors to whom you would like to leave money or other property, you can create a testamentary trust with instructions that the money should remain in the trust until the minors turn 18 or older. If you want to leave your 5 children your family home, but do not want to have them worry about how to manage it after your death, then you can leave instructions in your will that your executor is to sell the house and give the proceeds to your children in equal shares.

Your will must meet the requirements of New York law for it to be valid and your wishes followed. The law requires that a will is executed with specific formalities. You must sign your will at the end in the presence of two disinterested witnesses. The witnesses must also sign the will. Wills such as holographic (unwitnessed) wills or nuncupative (oral) wills are valid in New York only under very limited specific circumstances. Wills execute based on fraud, duress, or undue influence are not valid. Similarly, if the testator was mentally incapacitated, the will would not be valid.

It is critical that you work with a will attorney in New York to ensure your will is valid and that all terms are consistent with New York law. If your will is deemed invalid by the New York Surrogate’s Court, it will not be probated, and none of your wishes will be followed. Instead, your estate will be distributed to your heirs based on the rules of intestate succession. Your entire estate will go to your surviving spouse and your children. If you do not have children, 100% of your estate will go to your surviving spouse. If you have no children and no surviving spouse, your property will go to other relatives based on a statutory order for priority.

1. Consequences of partly ineffective testamentary dispositions of property to two or more residuary beneficiaries: Estates, Powers and Trust, § 3-3.4
2. Validity of a purchase of real property notwithstanding its disposition by will: Estates, Powers and Trust, § 3-3.8

If a testator directs in his will the purchase of an annuity, the beneficiaries to whom the income thereof is to be paid may not elect to take the capital sum directed to be used for the purchase of such annuity in lieu thereof, unless the will expressly confers such right or except as the will expressly provides for the purchase of an assignable annuity.  But nothing contained herein shall impair the right of election by a surviving spouse under 5-1.1 or 5-1.1-A.

In order ensure that your property is passed to the people of your choosing in the manner of your choosing, contact a skilled will attorney serving New York. The attorneys at the Law Offices of Stephen Bilkis & Associates have years of experience drafting complex wills and other estate documents, as well as representing clients in matters related to will challenges, estate litigation, and estate administration. Contact us at 800-696-9529 to schedule a free, no obligation consultation regarding your case. We represent clients in the following locations: the Bronx, Brooklyn, Long Island, Manhattan, Nassau County, Queens, Staten Island, Suffolk County and Westchester County.